New Credit Card rules take effect today

Congress threw consumers a bone earlier this year, and today is the day the new rules take effect.

Your credit card company must now give you 45 days notice before making significant changes to your interest rate or fees they charge.

And your credit card company must now send out statements to you at least 21 days before the payment is due.

Consumers also will be allowed to avoid future interest-rate increases and pay off any outstanding balance over time under the original rate terms.

Big credit still doesn’t have to tell you before they cancel your card. That notice can be sent to you after you’ve experienced embarrassment at checkout.

More reforms will follow in February 2010 and July 2010. I’m sorry to write that none of the reforms amounts to radical reform in favor of consumers, but the disclosures set to debut next summer may help consumers understand the legal-mumbo-jumbo-that-no-one-ever-reads by presenting the numbers and rules in plain English. We shall see.

But check your mail. Your credit card company likely raised your interest rate and fees before these rules took effect. You may have also been one of the many people whose cards were canceled for vague reasons because your credit card company decided you were ‘risky.’ Your card may be gone, but the debt and the obligation to pay the debt are not.

If your rates went up and you’re living on credit cards right now please take heed.

And if the whole thing has gotten to be too much and you find yourself ready for the fresh start provided by the bankruptcy code, seek the advice of a competent bankruptcy attorney (Avoid so called debt settlement companies or debt management outfits that advertise on AM radio. Those guys are out to rip you off).